In our last article, we talked about optimizing your supply chain. Today's subject is related to that post. Therefore, we recommend you read it first. Here, we want to analyze possible ways to optimize the last stage of the delivery process, which is called last-mile delivery. So, what can you do to optimize last-mile delivery? What optimization techniques can be implemented in an online store?
In fact, it all depends on your operating model. For instance, if you handle all the logistics processes in house, there are many ways to optimize last-mile delivery, such as route optimization for instance. It's a solution that comes in handy, especially for companies operating locally, like restaurants and catering companies. But what can you do to optimize last-mile delivery when you run an e-commerce business, and the scale of your operation is much more expansive?
What is last-mile delivery?
For starters, let’s talk about what last-mile delivery is exactly. In short, it’s the last stage of the parcel’s journey from the warehouse/manufacturer/distributor to the customer’s door. Typically, that part of the journey is carried out by a courier company or a postal service.
Mind you, last-mile delivery is essential concerning customer experience, and you have to know: There’s still a lot to do in this regard. In August 2019, Statista.com published the “Average Net Promoter Score for last-mile delivery services worldwide in 2018” report, and we must admit, the results are far from perfect.
A word of explanation. Net Promoter Score is the percentage of customers rating their likelihood to recommend a service to a friend as 9 or 10 (so-called "promoters") minus the percentage of customers rating at 6 or below ("detractors") on a scale from 0 to 10 (the result of the calculation is expressed without the percentage sign). And what are we able to see on this chart? In 2018, only customers living in the United States were satisfied with the last-mile delivery services. The world’s average result is -9.
This allows us to draw a conclusion: If you want to increase CX in your online store, take care of last-mile delivery. Perhaps, it’s the most straightforward way to make your customers happy!
Now, what can be done in practice? Let’s say you run an online store that operates in the whole country, maybe even abroad. Here are your options:
Carefully select the courier company and measure their performance
Several courier companies are operating globally, and there are hundreds of local ones. Indeed, you have a wide range of options! That's why you ought to conduct solid research. Find out which courier companies are prevalent in your country. For example, in the United Kingdom, the most popular courier companies are:
- Royal Mail (52% of answers)
- Hermes (16%)
- DPD (14%)
- Parcelforce (5%)
But you can do more: Talk with their representatives and compare their offers and conditions of the cooperation. By doing this, it will be much easier to find the perfect match. And what if you already have a courier company? Measure their performance, and ask customers if they are satisfied with the service provided. If the results don’t meet your expectations, perhaps it’s a good moment to think about finding a more reliable partner?
Introduce parcel tracking
Admittedly it's not a way to speed up last-mile delivery, but it can significantly improve customer experience. Nowadays, parcel tracking is a standard, and it should be available in your store as well. Today's consumers simply demand this service. Customers want to get updates while they're waiting for the parcel to arrive, especially if there's a delay or their package is sent from a different location.
If you cooperate with a modern and advanced courier company, we can say with almost 100% certainty that they have a parcel tracking system. All you have to do is integrate it with your store’s platform. And keep in mind, it’s a good practice to provide a parcel tracking link in the message sent to confirm the order.
Start using dark stores
In short, dark stores are retail outlets or distribution centers. They serve as transportation hubs for online orders. Customers can go there and collect products they have ordered online. Frequently, dark stores are located in convenient pick-up locations. A specific type of dark stores are self-service parcel pick-up stations located all over the country and open 24/7. For instance, Amazon offers their own pickup stations. They are called Amazon Hub Lockers and you can find them in more than 900 cities and towns across the U.S. Similar stations are offered by DHL in Germany.
Actually, this solution saves you the trouble of arranging last-mile delivery, making the entire endeavor much more straightforward and quick.
The effective Warehouse Management System (WMS)
If you want to optimize last-mile delivery, you have to have a fully operational and efficient WMS. Such software manages your inventory and parcels. If it doesn't work correctly, parcels can be sent with a delay. However, do keep in mind that it can also be a reason for parcel mix-ups!
Of course, the fully-functional WMS is one thing, and the warehouse itself is another. Make sure your inventory is correctly organized and updated. Read more about managing a warehouse in this article.
Sort out the local-delivery parcels
One of the easiest ways to enhance last-mile delivery is to sort out parcels delivered locally. Many eCommerce companies and fulfillment centers (like Omnipack) cooperate with both the global courier companies and local ones. If the parcel is addressed to a nearby location, use the local courier company. In many instances, they will manage to deliver such a parcel in a shorter time.
Work with the logistics operator
You cannot be good at everything. If you have problems with logistics, it's a clear sign that the time has come for the logistics operator. Such a company takes all the eStore's logistics activities off the owner's shoulders and manages all deliveries and returns. Omnipack is such a company. We have modern warehouses in critical locations in Poland, and we work with top-notch courier companies. As a result, our clients get the best logistics service possible. If you want to improve last-mile delivery in your store, we are at your service! With us, you don't even have to run a warehouse; you can use ours!
Drop us a line and see how easy and efficient logistics can be!